Just a quick one to let you know that I co-produce a blog with Jeff Cooper (see the recession entry),

it’s not an ordinary blog it’s a cross between a blog and a podcast…

…called

DOWNtoBIS

No typo, it stands for Down to Business Innovation Strategy, and each week Jeff and I talk you through an innovation (either technical or strategic) that’s useful for small business in thinking about maximising the growth potential from their marketing plan.

So quit reading and get learning…

www.youtube.com/downTObis

Hear from some of the graduates from the Step Change Communications, Coached Marketing Workshop held on the 7th March 2009. Find out what they got out of the course and how it impacted their businesses.

My view is YouTube is not some magic panacea, but it certainly has a role to play in propagating great advertising.

It’s the worlds video library and it’s open 24/7 with your local branch fully stocked and generally only as far away as your laptop or 3G mobile phone.

As word-of-mouth becomes word-of-mouse it’s now often easier to show or send somebody the great idea you’ve seen, rather than explain it.

It’s not about YouTube itself, it’s all about people connecting with ideas and then sharing them with each other. The delineation of commercial and non-commercial blurs in comparison to the issue of relevance. When it was new I used to search the top 10 of all time and the top 10 of the day – on the scout for interesting things; however as the comedian doing dance moves has been displaced by music videos and manga movies I kind of lost interest.

The top 10 then become merely the most memorable, “stuff” I’ve seen.
I do remember Big Ad. I also remember Borat singing, “throw the Jew down the well”. Within the mix is the legend of Old Gregg and some Chuck “the Iceman” Liddell bouts.
For brands there was some nifty Durex balloon animals and an awesome Adobe house of cards…but the lines have blurred. Then there was that Matt Dances video which was huge (even made it to Sunrise) which was sponsored after-the-fact, but by who? I’m not quite sure. I don’t know whether this stuff was sent to me on You Tube or not. I do remember it was sent to me online and YouTube is just my top-of-mind online video brand.

There are propagation strategies like trying to crowd source mimics (as I believe “flight of the conchords” http://flightlipdub.com/ have achieved) or more cast based methods like sponsored videos and TubeMogul. Channels are popular if you’ve got installments and opt-in loyalty. I guess my point is YouTube isn’t a communications idea, it’s just another of the 573 different contact points which we can put our message up on. Saying, “I’m going to have a great youtube viral campaign” is like saying, “I’m going to write a best seller”- J.K.Rolling stated with an idea about a boy wizard, not with her OBE acceptance speech.

To my mind it might be valid but before you act the test remains: will you get noticed? Is what you are trying to say clear? Is it relevant (to consumers and your business goal)?
The two main targets on YouTube appear to be everyone or really niche. You probably need to take a cold, hard a look at your own segmentation before embarking on the quest for the holy viral. We still remember Outpost.com, but the business died long ago.

My only dilemma now is whether to publish this to my little -read blog at www.StepChangeCommunications.com or the relative obscurity of my podcast channel on YouTube www.youtube.com/DOWNtoBIS

If you’d prefer the PDF version of this article
marketing-that-stands-out-in-a-recession

Are we facing tough times?

Despite not technically being in a recession in my home town, Sydney, Australia, I think we would all agree we are in for some tough times wherever you live. Most economies are facing some, if not all, of the following problems.

• Rising unemployment
• Currency devaluation
• Fluctuating interest rates
• Increase in foreign goods prices
• Reduced consumer spending
• Petrol price instability
• Retail discounting
• Less luxuries

Are we in a recession?

Not technically, but I would argue YES.

Recessions live in the minds of the consumers. Forget what the endless number of financial commentators and advisors are saying, or not saying, or debating.

If you ask the average Australian for the ‘real story’, they will tell you with certainty, that they are in a recession, we are in a recession.

That’s the bad news…

The good news

Before you baton down the hatches, start discounting products and hacking marketing budgets it’s important to have a look at the facts.

Consumer spending can increase. In two out of three post-war US recessions consumer spending actually increased. One possible explanation for this is that consumers have more money to spend on everyday items when they’re cutting back on ‘big ticket’ items and luxuries. What we often see in a recession is a move by consumers away from high purchase decision goods with high perceived
financial ramifications.

The stunning reality is that without those big ticket items consumers have more to spend on day-to-day items and will have a desire to spend more on these items. A little escapism equals a little indulgence.

Some categories will benefit

A recession is not always a bad thing. Some businesses will benefit like
select financial services, or low cost entertainment. The latter being a response to a consumer need for ‘escapism’ brought on by the doom and gloom. Just look at the significant increases in the gambling industry during the last Australian recession, 1990.

As we speak, we are witnessing a significant lift in McDonald’s (US) sales revenue as consumers look for a more value driven restaurant proposition.

There’s an opportunity to steal market share. Many brands will go into hibernation, forgetting that brand building is an ongoing process. This can be very imprudent as recession after recession we have seen brands suffer from this approach, especially in the long term. Consumers need to be spoken to, and if they’re not hearing from your brand, they will be hearing from someone else’s.

We actually see heightened levels of consumer awareness, particularly for value driven communications during these periods, which exacerbates the effects of disparity in share-of-voice between competing brands.

Unilever took advantage of this when it launched a value washing detergent during an Indonesian recession, Surf. The result was a 13% market share within two years.

Cheaper Ad rates

During times of recession the rise of ad rates tends to slow, even stagnate, compounding the advantages of increased share-of-voice creating a lower ‘real’ cost of advertising.

New Product Development

As well as new products and brands enjoying cheaper ad rates and greater share-of-voice during recession times there is a distinct, and historically sound, trend of consumers towards ‘value’. This opens the door for bundled services, more economic product variants, or brands that talk to the emphasized consumer motivator of value.

The keys to enjoying these ‘silver linings’ are tried and true. Don’t panic, have the right strategies to take advantage of the recession rather than be a victim of it and…innovate!

More on innovation later…

Leveraging the opportunities

It probably does not surprise you that someone working in advertising would take this view, but there is a wealth of evidence and research to back-up this suggestion.

Sustained communications are proven to make the most of the opportunities that a recession can bring and are the first line of defence in maintaining consumer loyalty. Perhaps the biggest case for maintaining adspend is the long-term growth available. In 2001, a study found that companies that choose to invest in high levels of advertising during recession times increase their market share by an average of 2.5 times in the long-term.

Source: Professor Andrew J. Razeghi, Kellogg School of Management, USA

Recession research
1: Strategic Planning Institute / Centre for Research & Development using Profit Impact of Market Strategy, 1990.
2: Dentsu Inc. Adspend during the 1985-6 Japanese recession.
3: McGraw-Hill, Laboratory of Advertising Performance.

Strategies for making the most of a recession

1.Increase absolute ad spend

Don’t stop talking to consumers. If anything, history has shown that during times of recession consumers are increasingly sensitive to getting the best deal, to getting the best value.

The important distinction here is that price, and short term tactical executions like discounting, are only one element of value and no one wants to ‘feel’ cheap. The reality is, maintaining consumer perception and brand building are as important, if not more important, during a recession.

Increased share-of-voice, lower media rates as well as a reduction in competitor and overall advertising make a recession a great time to steal valuable market share.

Recessions are episodic beasts, so even if your product or category is affected by reduced consumer spending you can rest assured that spending will return.

Studies have shown overwhelmingly that brands that advertise bounce back much faster than the industry average and gain valuable market share from competitors.

A bird in the hand is worth two in the bush, and three if it’s from a rival’s aviary!

2. Maintain high production values
Keeping in mind the value equation it’s important not to look cheap.

The opportunity here is to strengthen brand image, comparatively, by emphasizing perceived values in your product or service through high production values.

Competitors may cut ad spend, or move towards highly tactical advertisements and therein lies another opportunity for your brand to stand out.

3. Innovation
The broadest, but also possibly the most rewarding strategy is to innovate!

“I think it is more important to innovate through a recession, and certainly what we’re trying to do at P&G is to continue to bring sustaining and disruptive new brands and products for our consumers to make their lives better and offer them a little more value”

A.G. Lafley, Chairman and CEO, Proctor and Gamble

Focusing on innovation means a brand looks not only at its communications but perhaps more importantly its business.

New product development

A trend we often see in a recession is a shift in consumer spending from high to lower ticket items and firmly towards value. Recessions are a unique opportunity to fuel sales by reworking variant sizings to create better value for the consumer.

However, brands should be looking wider than size variants during a recession. They should focus on real and innovative NPD, bringing it forward rather than putting it off if possible.

Studies estimate that it now takes an average of six months for a competitor to replicate any new product feature. This reaction time is likely to be heavily impeded and resisted during times of recession by competitors and inconsequential if your new products or variants are short-term/disruptive or value driven.

Strategic partnerships / ‘portfolio marriages’

In the same vein, value bundles that include different variants, perhaps a travel size, or complimentary items from your portfolio can be used to woo consumers.

Proactive brands will look outside their portfolio for strategic partnerships that will equally benefit both parties. These can often be very economic and are very compelling for consumers, but more importantly, they step brands through a doorway that competitors will find hard to follow.

Innovative media vehicles
The benefits of recession advertising are many, but where it is said is ultimately as important as what and how many times.

In past recessions consumers with an increasing need for escapism, counterbalanced by a decrease in pocket change, have turned to low cost entertainment, like cinema; making it a premium place to grab not just eyeballs, but eyeballs associated with a positive consumer sentiment.

A recent poll by online research company, Pure Profile, suggests that similar trends are being seen in Australia at present, although, they are more likely to be towards entertainment sources like TiVo or Foxtel.

There is a greater reason to be looking at the media vehicles you are using.

Some media vehicles, like PR can be used cheaply and effectively to drive brands and take advantage of the heightened media awareness of consumers during recessions.

Communicating through channels that deepen engagement like digital, experiential and online can be the key to maintaining and generating consumer loyalty and fighting brand switching in the midst of a fickle backdrop.

There is gold to be found in your media spend during a recession.

SOURCE: “Where have you started to reduce your spending?” Results so far for UK and Aus. www.pureprofile.com

What’s next…

So let’s not panic. In the last five decades the average recession America has lasted just 11 months, while the longest expansion is just over six years and there are advantages to a recession. At the very least canny planning and strategy can put your brand well ahead of the competition.

What we know for sure is that loss minimization is not the only, in many cases it’s certainly not the best, way to go.

Written by Jeff Cooper
jeffreyghcooper@live.com

About the author…

Jeff currently works as a Business Innovation Strategist at Sydney’s thebrandshop, publishes a weekly webisode on innovative marketing strategy and powerful thinking as well as writes papers like this one on pressing business issues.

Check out
www.youtube.com/DOWNtoBIS

In a former life his passion for deeper branded engagements saw him conceptualise, design and implement industry leading experiential programmes across sponsorship, digital, online, mobile, with live events in all the key consumer environments; retail, transit and sports precincts, Australia’s largest music festivals and private properties.

In recent years he has worked with blue-chip brands the likes of; Vodafone, Nokia, Sony, Uniliver, Lynx, Fosters, Streets, Electrolux, Samsung, Canon, Westinghouse, CommSec & Kimberly Clarke.

See what some of our attendees from Step Change Communications, Coached Marketing Workshop on the 5th of December had to say…

It gets to the heart of the discussion that advertising is only ever one part of marketing.

Q.
WHAT SHOULD CAR MARKETERS BE DOING?
Falling sales and a collapse of finance options is threatening to cripple the automotive industry. Consequently, car marketers need to step-up their game If you had a car client, what would you advise them to do. Is it time to go retail or adopt a creative approach and focus on the brand? Should car ads be serious or use humour in the current environment? Chrysler is pushing its marques in a pro-American ‘Yes we can’ campaign – are there any tips in this for other car marketers?
A.
“SELLING LIKE HOTCAKES”
* First Toyota Prius on sale in Australia in 2001 – 137 sold.
* In 2006 – 2000 sold.
* First five months of 2007, 1300 sold. May tally of 380 sales is monthly record.
* Costs $37,400 to $46,900.
* Honda Civic Hybrid costs $32,990, but regularly sells out its 80 cars a month allocation.
Source: Federal Chamber of Automotive Industries.
Ok, so it’s a year out of date, and a lot happened in that year, so let’s look at some very recent numbers from another category:
“Apple revenue grew 35% year-over-year to $9.6bn, an increase of almost $2.5bn, according to its first quarter 2009 results” Posted Jan 2009.
My point is people don’t buy the ads, they buy the products and it’s the underlying innovation where car manufactures have to start. I had had been given 40 personal demos and rave reviews (oh and actually bought one) for the iPhone before I saw an ad for one. Don’t start with a wacky ad formula to try and charm consumers into buying- start with some value that rewards them for buying.
This doesn’t always mean retooling the entire factory, depending on the task at hand you might want to:
• Personalise: allow consumers to create personal designs on the outside of their cars and express their personality (can’t the industry do better than an optional racing stripe of a Ford Laser?)
• Harness WOM: seriously reward and incentivise passionate owners to entice others
• Target: produce, frame, price, package, sell and service to an aged, female, asian, gay, urban, mothers (any other sizable/relevant group or community)
• Innovate: Where’s the car that comes standard with LPG? Where’s the car that’s built for grubby kids in the back seat (can be hosed out)?
• Finance: Why screw punters with a separate finance company? Make your money on the car and provide company finance at cost, lease, hire-purchase. Retail companies have x4 year interest free. What are the options around cars?
• Engage: If the game’s test drives – then get experiential! Offer an alternative to public transport, weekend- come-to-your-home test drives, pick-up from work test drives- hell, start a manufacture “at cost” car rental company. What about a free community car pool?
• Empower: Which brand is getting behind hypermiling? http://en.wikipedia.org/wiki/Hypermiling providing the information, games, community, events and rewards for this to gain momentum (pardon the pun)
• JV/ Licensing: What car brand might JV or licence a co-branded model with interior designed by Benetton, Prada, Apple, bang-olufsen?
People aren’t just consumers, they’re people first. They want a car that they like the look of, the features of and that will suit their lifestyle. Then they buy into the brand to take away any risk and for the self-expressive and emotive benefits it can bring.